UPDATE 1-Banco de Chile to invest $75 mln in 2010
* Bank cautions against government post-quake tax plan
* Bank optimistic about 2010 (Updates with chairman comments in paragraphs 2, 6)
SANTIAGO, March 25 (Reuters) - Chile's No. 2 bank, Banco de Chile CHI.SN, said on Thursday it would invest $75 million in technology and infrastructure in 2010, broadly in line with investment levels last year.
"I am optimistic that 2010 will be a good year," Chairman Pablo Granifo said after a news conference.
Shares in the bank were up 0.88 percent in early Thursday afternoon trade at 51.75 pesos each, outperforming the wider market.
Granifo cautioned against a government plan to raise taxes to help finance reconstruction after a massive Feb. 27 earthquake that killed hundreds and damaged infrastructure and roads.
Larrain said on Thursday the new government's reconstruction plan would include a moderate tax adjustment, but that it would not be the axis of raising financing for the recovery phase. [ID:nN25245250]
"The issue of taxes should be the last alternative to be studied," Granifo said. "Obviously the issue of taxes affects investment one way or another."
Citigroup (C.N) this month increased its stake in the holding company for Banco de Chile CHI.SN to achieve a 50-50 interest along with its Chilean partners as they compete for the Chilean market with Spanish powerhouse Banco Santander STG.SN(SAN.MC).
Citi has now invested at least $1 billion in Banco de Chile's holding company over the last two months, increasing its stake from 32.96 percent to 50 percent in LQ Inversiones Financieras in two separate deals.
Banco de Chile posted profits of $509 million in 2009 in a shrinking Chilean economy. (Reporting by Alvaro Tapia Editing by Simon Gardner and Gunna Dickson)
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